The Gambler's Approach To Investing

I love this line from a recent John Bogle interview: “One thing that I strongly urge: Don't ever, ever, ever if you're an investor think of being out of the market or in the market,” Bogle is discussing the “fully valued” nature of today's stock markets and advocating slight changes to one's allocations. He says it's okay to reduce your stock market exposure a little bit to offset the potential for higher risk. This is an approach I fully endorse. I think that rebalancing a portfolio in a countercyclical strategy makes a lot of sense and better maintains one's behavioral comfort level with the propensity for higher risk late in a bull market.